By Andrew Atkinson, CWCA
The number "6" can have many connotations. It can be the number of players your hockey team puts on the ice during a game, how many eggs you'll find when you open a half-dozen container, or how many points you're given when you score a touchdown.
But perhaps nowhere does the number "6" have more impact, at least in terms of your business, than when it comes to managing a claim for an employee who is injured on the job. That's where Injury Code #6, the designation for a "Medical Only" injury, comes into play. And it's a number well worth remembering because it is the designation you want your agent to implement as soon as possible for an injured employee. It's the designation that says you have done what it takes to have that employee return to work doing just about anything to minimize the financial impact on your bottom line, your company's productivity, and your company's ability to win bids. It is not a number to be taken lightly. Injuries other than "6" will increase your E-Mod score quickly, whereas the "6" designation will have minimal negative impact on your E-Mod.
Many employers believe that when an employee is getting paid by the insurance carrier they are actually "saving" money because the injured party is only receiving two-thirds of their pay once they are taken off the payroll books. After all, they think, "Isn't that why I pay insurance, so I don't have to pay injured employees?" But what many fail to realize is that the injury claim sits on their books for three years, like a festering sore, getting worse and worse, while the employee is sitting home watching daytime TV with personal injury ads telling them they should sue ("Call us today at 1-800-GET-PAID!").
Here's a good example. A worker on a construction site hurts his back and goes out on Workers' Comp. The primary insurance cost is $1,241, which stays on the Experience Mod for three years, totaling $3,723 in insurance costs as well as a higher Experience Mod. Now, if Mr. Bad Back had returned to work in any type of light duty, the actual loss penalty would have been reduced by 70% to $372, or $1,116 over the three years. A total reduction of $2,607 over the life of the claim. [Editor's note: In states that have adopted the experience rating adjustment (known as ERA states), when a claim is medical only (no lost-time or disability payments), the calculation of the mod reduces the value of the claim by 70%. But even in non-ERA states, the value of keeping claims in the medical-only status should not be overlooked. Medical-only claims that become lost-time claims will adversely affect an employer's Workers Comp costs.]
Obviously, the name of the game when it comes to managing claims properly is to have a well thought out Return-To... ANYTHING plan in place. But there are still other valuable pieces of the puzzle that must fall into place to minimize both recovery time for the employee and overall claim cost, such as:
Managing claims doesn't have to be difficult, or frustrating, or a feeling that no matter what you do, every time an employee gets hurt on the job you will have to pay big bucks while watching your E-Mod score climb higher. True, there will be costs incurred with an injury; it's in many ways a part of doing business, particularly in an industry like construction, where any job site can be a virtual minefield of potential injuries. But by taking the necessary steps and being pro-active in getting your injured employee back to doing anything within their restrictions, you will mitigate the financial fallout that will occur should you ignore it. And when it comes to managing injury codes, what you don't know can, and will, hurt you.
Andrew Atkinson is a Masters Work Comp Advisor (MWCA) for Minard-Ames Insurance Services, Phoenix, AZ, and a frequent speaker to various trade associations and annual conferences.